The CARES Act (COVID-19 stimulus) provides under Section 2202 the ability for everyone to withdraw up to $100,000 (total in aggregate between all qualified retirement accounts) and avoid the 10-percent early withdrawal penalty for coronavirus-related purposes made on or after January 1, 2020.
Put all your money back later!
Any individual who receives a coronavirus-related distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make 1 or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which such individual is a beneficiary.
What qualified as “coronavirus-related purposes”?
- Who is diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention, or
- Whose spouse or dependent is diagnosed with such virus or disease by such a test, or
- Who experiences adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury.
Still employed and not able to cash your 401K? No problem!
You have up to 180 days from the CARE Act official date to withdraw up to $100,000. This is an increase from the normal $50,000 level AND your first payment is delayed for 1 year, while the 5-year period and normal loan term shall be disregarded.